Venezuela Plans To Control Bolivar As Inflation Set To Hit 1M Percent


In an effort to control inflation, President Nicolas Maduro announced on Wednesday that five zeroes will be removed from Venezuela’s currency, Bolivar Soberano. According to Maduro, this currency overhaul seeks to “protect” the bolivar. “Five zeros fewer, so that we may have a new, stable financial and monetary system.” he said.
The original plan was to remove three zeroes in June but when International Monetary Fund (IMF) warned that the inflation is projected to hit 1 million percent, the government decided to postpone the implementation.
“The monetary reconversion will start on Aug. 20,” Maduro said in a televised broadcast, presenting the new bills that are due for release next month.
He added that the currency adjustment would tie the bolivar to the recently launched state-backed cryptocurrency called the petro. However, he did not provide details regarding petro.
Cryptocurrency analysts stated that petro is not seen as credible because of the lack of confidence in Maduro’s government. The mismanagement of the national currency is holding back the strength of petro in the cryptocurrency market.
The collapse of Venezuela’s economy began during the oil price crash in 2014. The government claims that they have fallen victim to the “economic war” steered by opposition leaders who are backed by Washington, which heavily imposed several sanctions against Maduro’s administration late last year.
With the country’s high inflation rate, people are scrambling for cash. Venezuela’s minimum wage is estimated at $1 a month which makes it impossible for citizens to live decently. They cannot even afford to provide their families’ basic needs. People are desperately seeking ways to escape this economic crisis.
Maduro sees the currency overhaul as the economy’s saving grace. He also proposed on Wednesday, to revise the currency crime laws in order to encourage new foreign investments.
Maduro also said he plans to transfer a concession bloc of the vast Orinoco heavy oil belt to the Central Bank, which he believes would help revive the bank’s international reserves.

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